3. A company that produces a single product wants to determine its production, inventoryholding and purchasing policies for the months of January, February and March. The firm hasto meet the determined amount of demand every month. In order to meet this demand, it canproduce itself or purchase that amount from another company. However, if production is to bemade, either at least 100 units will be produced or not at all. In addition, due to technicalcapacities, maximum amounts that can be produced in a month is 400 units. In addition, thecompany has to pay 750$ of tax in the months it produces. The company can transfer the excessdemand to the next month by bearing the inventory cost, but the company cannot stock morethan 75 products due to the physical conditions in the warehouse. If the company wants to keepmore units on inventory, they can rent a warehouse with a capacity of 125 products for 150$per month. However, during this period, the company can rent this warehouse for a maximumof 2 months. The company does not have a demand at the beginning of production, but at theend of the period, it is requested to have at least 35 units. The data related to the problem aregiven in the table.Propose the mathematical model that will enable the firm to meet the demand with minimumcost during this period. (40p)JanuaryFebruaryMarchDemand250325200Production Cost564Holding InventoryCost11,50,8OutsourcingCost665

Answer) We can utilize linear programming to create the mathematical model for the firm's…

Answered: 3. A company that produces a single…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

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The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
15) JBs needs to determine what quantity of a new tennis racquet to order for the upcoming summer season. They sell the racquet for $110 and procure it from their supplier for $70. Any leftovers will be marked down 60% and are expected to all sell at that price. Anticipated demand is modeled with a normal distribution where the mean is 120 and the standard deviation is 25. How many racquets should JBs order if they want to meet a 95% target fill rate? A) 130 C) 162 B) 127 D) 149
B). A company wants to develop a level production plan for a family of products. The opening inventory is 100 units, and an increase to 150 units is expected by the end of the plan. The demand for each period is given in what follows. How much should the company produce each period? What will be the ending inventories in each period? All periods have the same number of working days. Period 1 4 6. Total Forecast Demand | 100 120| 130 140 120 | 110 Planned Production Planned 100 Inventory C). For the following data, calculate the number of workers required for level production and the resulting month-end inventories. Each worker can produce 15 inventory is 9000 units. units per day, and the desired ending Month 1 2 3 4 Total Working Days 20 24 12 19 Forecast Demand 28,000 27,500 28,500 28,500 Planned Production Planned Inventory 11,250
Mary hopes to sell 10,000 pieces of chrysanthemum last November but she was able to sell 15,000 chrysanthemum. Her chrysanthemum is sold at 20 pesos each. Her total expenses was 150,000, hence, cost per unit is 15.00. What was her sales volume variance? *25,00075,00015,000100,000 Mary hopes to sell 10,000 pieces of chrysanthemum last November but she was able to sell 15,000 chrysanthemum. Her chrysanthemum is sold at 20 pesos each. Her total expenses was 150,000, hence, cost per unit is 15.00. What was her sales volume variance? *25,00075,00015,000100,000
Annual demand for number 2 pencils at the campus store is normallydistributed with mean 1,000 and standard deviation 250. The store purchases thepencils for 6 cents each and sells them for 20 cents each. There is a two-monthlead time from the initiation to the receipt of an order. The store accountantestimates that the cost in employee time for performing the necessary paperworkto initiate and receive an order is $20, and recommends a 22 percent annual interest rate for determining holding cost. The cost of a stock-out is the cost of lostprofit plus an additional 20 cents per pencil, which represents the cost of loss ofgoodwill.b. Find the simultaneous optimal values of Q and R.
Product D is stocked only at the AMC Chemical Company's Dallas warehouse and at the company's plant warehouse in Akron. The sales director has forecast product sales from the Dallas warehouse to be 40 units per week for the next 8 weeks. Product D is manufactured at the firm's Akron plant using 2 units of ingredient X per unit of product D. Suppose product D's actual sales at the Dallas warehouse in week 2 were 31 units. Again, all planned shipments/orders were released and expedite actions taken. What action would the master scheduler take on the basis of this information? In this situation, what modifications to the master production schedule might be taken? (4 points) Information: Ingredient X Projected available balance: 4 Units Safety stock quantity: 2 units Product D in Dallas Warehouse Product D in Plant Projected available balance: 85 Units Safety stock quantity: 5 units Lead time: 2 weeks Warehouse Projected available balance: 42 Units Safety stock quantity: 2 units Lead time:…
Demand for stereo headphones and music players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for this year was as follows: MONTH DEMAND (UNITS) January 4,150 February 4,250 March 3,950 April 4,350 May 4,950 June 4,650 July 5,250 August 4,850 September 5,350 October 5,650 November 6,250 December 5,950 a. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 3.8. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. To be reasonably confident of meeting demand, Nina decides to use 3 standard errors of estimate for safety. How many additional units should be held to meet this…
Q: A hardware company stocks nuts and bolts and orders them from a local supplier once every 2 weeks (10 working days). Lead time is 2 days. The company has determined that the average demand for 1⁄2 inch bolts is 150 per week (5 working days), and it wants to keep a safety stock of 3 days’ supply on hand. An order is to be placed this week, and the stock on hand is 130 bolts.a. What is the target level?b. How many 1⁄2 inch bolts should be ordered this time?
Bernie’s Bike Shop receives the following trade discounts: 20/15/15. The vendor’s price list indicates that 20 percent off list price is for purchasing bikes in quantities of 100 or more, 15 percent off list price is for assembling the bikes for customers, and 15 percent is for sales promotion and local advertising. If the manufacturer’s list price is $550, what should Bernie pay for each bike if he orders 110 bikes at a time, assembles the bikes, and displays and advertises them?
Problem A large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as: Price = 150 − 0.01 × Demand for an annual printing of this particular product. The company is planning its productions for the year 2021. The company is considering the production of a certain number of 2,000 pages units. In 2019 the company had produced 4 similar units but with fewer pages count per unit (1,200; 1,400; 1800; and 1,900), and the material costs associated with those 4 units are (14.15 JD, 15.65 JD, 18.25 JD, and 18.90 JD respectively). The material cost index values were 185 for 2018, 193 for 2019, 200 for 2020, and 206 for 2021). The fixed costs per year (i.e., per printing) = 50,000 JD, and the variable cost will consist of the material cost and the labor cost. The company started to produce 2000 pages unit in 2021, and the project management team observed that 8.23 labor…

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